Corporate Legal System – Corporate Regulation
Semester: VIIIX
BA.LL.B. (Hons.-I)
Session: January to April 2015
DR. Y. Papa Rao
Introduction to the Course:
In the present context, it is widely recognised that “the two most powerful institutions in the society are the business and government; where they meet on common ground – amicably or otherwise – together they determine public policy, both foreign and domestic for a nation.[1] Historically, the role of government in respect of business varied considerably in kind and degree, from laissez fair and mercantilism to conventional communism characterized by centralized planning and almost state monopoly. The last six decades or so, the period since the end of the II World War and the coming into being of the World Bank – IMF and GATT, have witnessed several shifts, evolutionary to revolutionary, in approach, policy and government intervention in business across the world. Thus the need of the hour is to identify the areas of concern then adopt, and implement an effective regulatory framework that provides paradigm for the business enterprises and corporate entities to foster the market.
Markets, across the globe are undergoing profound, unprecedented and fast-paced changes. The change is from regulation to management; the change is from regulation to development. This change in the world market has changed the role of regulators as well. Regulation within the corporate sector cover a broad spectrum of activities extending from providing a suitable environment or a developing a culture that encourages corporate houses to enter the market, to promote business, to share liabilities, bear risks, to plan for best use of resources and to finally ascertain the end results of the corporate entities.This necessitates for having a separate paper on Corporate Regulation so that the role and function of the regulators can be meticulously studied.
Module 1. Introduction
1. Basicconcepts and dimensions
2. Financial regulation – scope, rationale and policies.
3. Financial system - Overview
Module 2. Regulatory Framework – Regulators
1. Government –
Business and Government
Legal environment
2.Ministry of Finance – Objective and Vision
Function, Role
E-Governance
MCA-21
3. Registrar of Companies.
4. Securities Exchange Board of India (SEBI)
5. Reserve bank of India
6. Self RegulatoryOrganisations (SRO)
7. Ombudsman
References
SEBI Regulations:
ü SEBI (Self Regulatory Organizations) Regulations 2004
ü SEBI (Ombudsman) Regulations, 2003
Module 3. Corporate Regulation Under Indian Companies Act
1. Directors – position, role and function
2. Individual Shareholder Right, Corporate Membership Rights, Derivative Action
3. Transfer and transmission of securities
4. Company Secretary – regulation
5. Investigation in the affairs of the company
6. Investors rights under Companies Act 1956
7. Prospectus and Disclosures
Module 4. Protection of Investors through Regulation
1. Rights of Investors under SEBI, SCRA and Listing Agreement
2. Dematerialisation of Securities – Depositary System & Procedures
3. Buy-back of Shares
4. Issue of ESOP and Sweat Equity Shares
5. Prohibition of Fraudulent and Unfair Trade Practices
6. Investor Education and Investor Grievance Redressal Mechanisms
References
SEBI Regulations:
ü SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations 2003
ü SEBI (Ombudsman) Regulations, 2003
ü SEBI (Depositories and Participants) Regulations, 1996
ü SEBI (Employee Stock Option Scheme (ESOP) Guidelines
ü SEBI (Issue of Sweat Equity) Regulations, 2002
ü SEBI (Prohibition of Insider Trading) Regulations 1992
Module 5. Corporate Governance
1. Corporate Governance : need for regulation – concept, benefits
2. Evolution, best practices
3. Corporate governance - features and problems of law reforms
4. Codes and guidelines on corporate governance - Analysis
References
ü Cadbury Report 1995
ü CII Voluntary Code of Corporate Governance (1998)
ü Kumarmangalam Birla Committee Report (1999)
ü Malegam Committee Report (2002)
ü Naresh Chandra Committee Report (2002)
ü Narayan Murthy Committee report (2003)
ü J.J. Irani Committee Report (2005)
ü Corporate Governance Voluntary Guidelines 2009
ü Listing Agreement, Clause 49& Sec 177 of Companies Act 2013.
Module 6 Corporate Social Responsibility
1. CSR – concept, different approaches,
2. Problem in delimiting boundaries.
3. Regulation – Voluntary CSR
4. Current Issues.
References
ü CSR Voluntary Guidelines 2009
ü National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Business 2011
ü Companies Act 2013
Other References:
Webliography:
1. http://www.sebi.gov.in/ [Securities Exchange Board of India]
2. https://nsdl.co.in/ [National Securities Depositories Ltd.]
3. https://cdslindia.com/ [Central Depository Securities Ltd.]
4. http://www.nse-india.com/ [National Stock Exchange]
5. http://www.bseindia.com/ [Bombay Stock Exchange]
6. http://www.nasdaq.com/ [National Association of Securities Dealers Automated Quotation System]
7. http://www.mca.gov.in/ [Ministry of Corporate Affairs, GOI]
8. http://www.rbi.org.in/home.aspx [Reserve Bank of India]
9. http://finmin.nic.in/ [Ministry of Finance]
10. http://www.crisil.com/index.jsp [CRISIL]
11. http://www.dipp.gov.in/ [Department of Industrial Policy and Promotion]
Important Acts
1. Companies Act, 1956
2. Securities and Exchange Board of India Act, 1992
3. Securities Contract Regulation Act, 1956
4. Foreign Exchange Management Act, 1999
5. Reserve Bank of India Act 1934
6. Depositaries Act 1996
Books
1. Andrew Kakabadse (ed), Corporate Social Responsibility, EABIS (2006)
2. Bharat’s Manual of SEBI, 16th Ed (2009) vol. 1 & 2
3. BN Gururaj, Commentaries on FEMA, Money Laundering Act, and COFEPOSA, Wadhwa, 2005
4. Charlesworth& Morse, Company Law
5. DD Prentice and PRJ Holland, Contemporary Issues in Corporate Governance, Clarendon Press: Oxford (1993)
6. Gower & Davies, Principles of Modern Company Law
7. Jonathan Charkham&anne Simpson, Fair Shares – The future of shareholder power and responsibility, Oxford University Press
8. Joseph A. McCahery and Vermeulen, Corporate Governance of Non-Listed Companies, Oxford (2008)
9. K Sekhar, Guide to SEBI Capital Issues, Debentures, & Listing, 3rd Ed. in 2 volumes, Wadhwa, 2003
10. K. Majumdar, Dr. G. K. Kapoor Company Law & Practice, Taxman
11. Luc Thevenoz and RashitBahar (eds), Conflict of Interest: Corporate Governance and Financial Markets, Kluwer Law International (2007)
12. Palmer, Company Law
13. Pennington, Company Law
14. Phillip R. Wood, Regulation of International Finance, The Law and Practice of International Finance Series, Thomson: Sweet & Maxwell (2007) (Chapters 1-7)
15. Rainer Grote and ThiloMarauhn, The Regulation of International Financial Markets: Perspectives for Reform, Cambridge (2006)
16. Ramaiya, Guide to Companies Act, 16th Ed., Wadhwa, 2006
17. RenuJatana and David Crowther, Corporate Social Responsibility: Theory and Practice with Case Studies, Deep & Deep (2007)
18. Robin Hollington, Shareholder’s Rights, 5th Ed., Thomson: Sweet & Maxwell, (2007)
19. Subhasis Ray, Corporate Social Responsibility: Cases, ICFAI Publication.
20. T. P Ghosh on Companies Act 2013, Taxmann.
21. Taxmann’s Companies Act 2013.
[1] Marshall E. Dimock, Business and Government, New York: Holt, Rhinemann and Winston Inc. 1960, p.1.